Monday, March 30, 2009

TOP STORY >> City joining water group

The Jacksonville Water Commission on Wednesday voted to join the Lonoke White Public Water Authority, by which Greers Ferry Lake will become a future water source for Jacksonville.

The unanimous board vote came after much deliberation, as the commissioners were already grappling with the amount of a rate increase needed to cover Jacksonville’s share of improvements to the Central Arkansas Water system.

The contract signing solidifying the deal is expected by early to mid-May.

The pressure was on the commissioners to make a decision because they have been told only a narrow window exists to apply for low-interest loan money likely to come from federal stimulus funds, which would help pay for the Lonoke White transmission lines and a treatment plant. The project is estimated to cost $65 million.

Commissioners viewed joining Lonoke White as “insurance” in the case of emergencies such as transmission problems with water coming from CAW lines attached to the I-430 bridge.

Buying into Lonoke White could also mean another long-term water source as Jacksonville well fields are expected to completely shut down by the year 2020.

The vote to join Lonoke White came after commissioners listened to Terry House, general manager of Grand Prairie Bayou 2 Water Company, who implored them to sign on to the project, and Bill Cypert, secretary for Cabot Water Works, who spoke against joining at this time.

House told the group that Lonoke White is one of three water projects in Arkansas that have strong support from the state as a recipient for federal-stimulus funds.

“Sixty-five million dollars of 1 percent money has been set aside for Lonoke White,” House said. “They are wanting commitments to turn in when the money is here – could be the middle of next year.”

According to Cypert, Cabot Water Works is wary of signing on to Lonoke White because it seemed like a rush job simply to obtain cheap financing when not all the facts are in.

Too many questions remain, he said, about what Cabot would pay toward construction of the system, not to mention operations once it is up and running.

Instead, he urged his Jackson-ville counterparts to “wait five years and build a bigger line, which would be more cost effective. Lonoke White is very candidly pushing this over 1 percent money.”

Following the meeting, Cypert said that Cabot Water Works has not rejected the idea of joining Lonoke White, but has already decided to not join if it means increasing rates.

The original agreement with Lonoke White was to purchase 220,000 gallons per day, which is affordable at current rates, but now the project planners want Cabot to buy more than 930,000 gallons per day, which is unaffordable with current rates.

Cypert is troubled that the Cabot commissioners have not been allowed to see the plans, but are being asked to share in costs.

Before any decision, Cabot commissioners want some answers to questions about costs sent to the project planners a couple of weeks ago.

“We are currently in a detailed analysis phase of the options,” Cypert said following the meeting.

Around $24.5 million in stimulus funds have been earmarked for Arkansas’ drinking water state revolving fund programs, for which Lonoke White could apply for a grant and or loan.

The Arkansas Natural Resources Commission has a deadline of Feb. 17, 2010 by which the agency is required to have signed construction contracts.

“That does not leave them (project planners) much time to meet paperwork requirements, so we are telling them the sooner the better –hoping by the end of April – to get water contracts from all entities to show that they are serious,” said Dave Fenter, finance manager for the ARNC.

As for the promise of “1 percent money,” that is just talk right now, Fenter said. “It will be low interest, and that is one figure that has been mentioned, but it is not for certain what it will be. That is to be decided way down the road” by the commission and Gov. Mike Beebe, who will give final approval on what projects are funded.

The cost of joining Lonoke White will be built into the rate hike that is under review by the commission. The rate changes will affect all Jacksonville water users – residential, commercial, inside and outside city limits, as well as its wholesale customers.

The rate increase is to be finalized in April in time to ask for approval by the Jacksonville City Council at its April 16 meeting, which will include a public hearing on the proposed rate change.

The rate increase is also being triggered by a 5.6 percent rate increase that Central Arkansas Water meted out to all its wholesale customers at the first of the year.

The new rates would go into effect immediately and would be reflected on May bills.

Commission consultant Kirby Rowland advised the group to consider higher construction costs of bringing water from Greers Ferry if they delay the project 10 or 20 years when the water is needed to meet daily demand.

He cautioned them to build assurances into the contract with Lonoke White so that Jacksonville would not pay more than what project planners are telling them.

“If bids come in twice as much, you need to have some control; you need to agree to conditions you are agreeing to,” Rowland said.

The maximum daily capacity of the Jacksonville Water Works system is 9.5 million gallons. By 2025, when Jacksonville’s population is projected at 50,000, the maximum should be at 14.3 million gallons daily, according to a study by Garver Engineers. Lake Winona and Lake Maumelle, the CAW sources, should be able to meet the increased demand for some time.

Currently, Jacksonville’s water needs are met by city-owned well fields and water purchased from CAW. The two sources together supply about 5 million gallons each day to meet the needs of Jacksonville rate-payers, Little Rock Air Force Base, and the neighboring utilities that buy from Jacksonville Water Works – Cabot, Bayou Two and Furlow.

By joining Lonoke White, Jacksonville and its wholesale water customers would be ensured an additional 1 million gallons of water from Greers Ferry, once transmission lines are built.